Filed Under Rule 424(b)(3)
File No. 33-48128
PRICING SUPPLEMENT NO. 41
DATED JUNE 23, 1994
To Prospectus dated June 2, 1992 and
Prospectus Supplement dated July 24, 1992
E. I. DU PONT DE NEMOURS AND COMPANY
MEDIUM-TERM NOTES, SERIES F
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
(FIXED RATE)
DSE-CUSIP: 26353V BL2
Face Amount: $26,000,000 Net Proceeds to Company:
$25,961,000
Issue Price: 100% Specified Currency: U.S.
Dollars
Original Issue Date: Determination Agent:
July 5, 1994 Goldman, Sachs & Co.
Stated Maturity: Form [X] Book-Entry
July 5, 1995 [ ] Certificated
Interest Rate: 5.45% Reference Date:
June 23, 1995
Interest Payment Dates: January 5, 1995 and July 5, 1995
Minimum Denominations: N/A
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Redemption: [X] The Notes cannot be redeemed prior to the Stated
Maturity.
[ ] The Notes may be redeemed prior to the Stated Maturity.
Initial Redemption Date:
Initial Redemption Price:
Annual Redemption Price Reduction:
Repayment: [X] The Notes cannot be repaid prior to the Stated Maturity.
[ ] The Notes may be repaid prior the Stated Maturity.
Initial Repayment Date:
Initial Repayment Price:
Annual Repayment Price Reduction:
Discount Notes: [ ] Yes [X] No
Total Amount of OID:
Yield to Maturity:
Initial Accrual Period OID:
Principal Discount or Commission: 0.150% Agent: Goldman, Sachs & Co.
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<PAGE>
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes
described herein (which are Indexed Notes) supplements, and to the extent
inconsistent therewith replaces, the descriptions of the general terms and
provisions of the Notes set forth in the accompanying Prospectus Supplement
and of the Debt Securities set forth in the accompanying Prospectus, to which
descriptions reference is hereby made. All terms used but not defined herein
which are defined in the accompanying Prospectus or Prospectus Supplement
shall have the meanings therein assigned to them. Any payment required to be
made in respect of a Note on a date that is not a Business Day need not be
made on such date but may be made on the next succeeding Business Day with
the same force and effect as if made on such date. No additional interest
will accrue as a result of such delayed payment. "Business Day" means any
day, other than a Saturday or Sunday, that is not a day on which banking
institutions are authorized or required by law or regulation to be closed in
the City of New York.
Payment of Interest
The Notes will bear interest at the fixed rate per annum stated
above. Interest will be payable on January 5, 1995 and at Stated Maturity.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
Payment of Principal
The principal amount of a Note payable at Stated Maturity shall be
the greater of (i) zero and (ii) an amount determined by the Determination
Agent on the Reference Date based on the following formula:
Face Amount + Face Amount x [10 x (USD5-LIBOR-1.26%)]
See "Description of Notes--Certain Definitions" for the definition
of certain terms used in the foregoing formula.
The principal amount of a Note payable at Stated Maturity thus will
be determined with reference to the five-year mid-market U.S. Dollar swap
rate, and three-month LIBOR, but will never be less than zero. Depending on
such rates on the Reference Date, the principal amount payable at Stated
Maturity will range from zero to an amount in excess of the Face Amount. In
the absence of manifest error, the determination by the Determination Agent
of the principal amount payable at Stated Maturity shall be final and
binding.
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<PAGE>
Certain Definitions
"USD5" means the rate determined by the Determination Agent on the
Reference Date in accordance with the following provisions: USD5 will be
determined on the basis of the mid-market five-year U.S. Dollar swap rate
which appears on the Reuters Screen SWAP Page as of 11:00 A.M., London time.
If such rate does not so appear on such page, USD5 will be determined on the
basis of the mid-market five-year U.S. Dollar swap rate which appears on the
Telerate Page 19901 as of 11:00 A.M., London time. If such rate does not so
appear on such page, the Determination Agent will request each of five
Reference Dealers to provide the Determination Agent with its quotation for
the five-year U.S. Dollar swap rate at approximately 11:00 A.M., London time,
on the Reference Date in an amount that is representative of a single trans-
action for such Reference Dealer at such time. The Determination Agent will
disregard the highest and lowest of the five quotations and "USD5" will be
the arithmetic mean of the remaining three quotations. If fewer than five
but at least two such quotations are provided, the rate shall be the
arithmetic mean of the quotations without disregarding any quotations, and,
if fewer than two quotations are provided as requested, the rate will be
determined by the Determination Agent by such method as the Determination
Agent determined, in good faith, in its absolute discretion.
"U.S. Dollar swap rate" means, in general, a fixed per annum rate
of interest quoted on an Actual/360 day basis and paid semi-annually that a
hypothetical fixed rate payor would be prepared to pay under an interest rate
swap or exchange agreement, and for which such payor would expect to receive,
in return, over the period of years specified, a floating rate of interest
equal to the then-prevailing six-month U.S. Dollar LIBOR rate.
"Reuters Screen SWAP Page" means the display page so designated on
the Reuter Monitor Money Rates Service (or such other page as may replace
that page on that service, or such other service as may be nominated as the
information vendor, for the purpose of displaying rates or prices relating to
U.S. Dollar swap rates).
"Telerate Page 19901" means the display page so designated on the
Dow Jones Telerate Service (or such other page as may replace that page on
that service, or such other service as may be nominated as the information
vendor, for the purpose of displaying rates or prices relating to U.S. Dollar
swap rates).
"LIBOR" means the rate determined by the Determination Agent as
follows:
(i) With respect to the Reference Date, the Determination
Agent will determine the arithmetic mean of the offered rates for
deposits in United States dollars for the period of three months
commencing on the second London Banking Day immediately following
the Reference Date, which appear on the "Reuters Screen LIBO Page"
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<PAGE>
at approximately 11:00 a.m. London time, on the Reference Date. If
at least two such offered rates appear on the Reuters Screen LIBO
Page, LIBOR with respect to the Reference Date will be such
arithmetic mean.
(ii) If fewer than two such offered rates appear on the
Reuters Screen LIBO Page, the Determination Agent will request the
principal London office of each of four major banks in the London
interbank market, as selected by the Determination Agent, to
provide the Determination Agent with its offered quotation for
deposits in United States dollars for the period of three months
commencing on the second London Banking Day immediately following
the Reference Date to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on the Reference Date and in
a principal amount equal to an amount of not less than U.S.
$1,000,000 that is representative of a single transaction in such
market at such time. If at least two such quotations are provided,
LIBOR will be the arithmetic mean of such quotations. If fewer
than two such quotations are provided, LIBOR in respect of the
Reference Date will be the arithmetic mean of rates quoted by three
major banks in The City of New York selected by the Determination
Agent at approximately 11:00 a.m., New York City time, on the
Reference Date for loans in U.S. dollars to leading European Banks,
for the period of three months commencing on the second London
Banking Day immediately following the Reference Date and in a
principal amount equal to an amount of not less than U.S.
$1,000,000 that is representative for a single transaction in such
market at such time; provided, however, that if fewer than three
banks selected as aforesaid by the Determination Agent are quoting
such rates as mentioned in this sentence, LIBOR shall be calculated
as of the first preceding day on which it can be calculated by one
of the means set forth above.
"Reuters Screen LIBO Page" means the display designated as page
"LIBO" on the Reuters Monitor Money Rates Service (or such other page as
may replace the LIBO page on that service for the purpose of displaying
London interbank offered rates of major banks).
"Reference Date" means June 23, 1995, unless such day is not a
day on which commercial banks in New York City and London are open for
business (including dealings in foreign exchange and foreign currency
deposits) (a "New York and London Banking Day"), in which case the
Reference Date shall be the next succeeding New York and London Banking
Day.
"Reference Dealer" means any major bank or banking corporation
in London, selected in good faith by the Determination Agent, which will
provide offered quotations on the relevant swap rates.
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<PAGE>
IMPORTANT INFORMATION
An investment in the Notes entails significant risks that are not
associated with a similar investment in other Debt Securities. Such risks
include, without limitation, the possibility of significant changes in U.S.
Dollar swap rates, LIBOR or the spread between the two. Such risks generally
depend on factors over which the Company has no control.
THIS PRICING SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AND
PROSPECTUS SUPPLEMENT DO NOT DESCRIBE ALL THE RISKS OF AN INVESTMENT IN THE
NOTES. THE COMPANY BELIEVES THAT THESE RISKS ARE POTENTIALLY TOO VARIABLE TO
ASCERTAIN AND DESCRIBE WITH ANY REASONABLE DEGREE OF CERTAINTY AND
INCORPORATING EVERY ECONOMIC, FINANCIAL, POLITICAL AND MILITARY CIRCUMSTANCE,
AMONG OTHER THINGS, WOULD BE IMPRACTICAL. PROSPECTIVE INVESTORS SHOULD
THEREFORE CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS
ENTAILED BY AN INVESTMENT IN THE NOTES. SUCH NOTES ARE NOT AN APPROPRIATE
INVESTMENT FOR INVESTORS WHO ARE UNFAMILIAR WITH USD5 AND LIBOR SPREAD
TRANSACTIONS.
HISTORIC RATES
The following table sets forth certain historical swap rates as
reported by Bloomberg Financial Markets on the last New York Business Day of
the month indicated:
Five-Year
U.S. Dollar 3 Month Spread in
Month-End Swap Rate LIBOR Basis Points
========= =========== ======= ============
1989:
March 10.1900 10.3125 (12.2500)
June 8.7700 9.3125 (54.2500)
September 9.1100 9.1875 (7.7500)
December: 8.6700 8.3750 29.5000
1990:
March 9.4100 8.5000 91.0000
June 9.0500 8.3750 67.5000
September 9.0300 8.3125 71.7500
December: 8.3900 7.5625 82.7500
1991:
March 8.3900 6.3750 201.5000
June 8.4900 6.1875 230.2500
September 7.4200 5.6250 179.5000
December: 6.4900 4.2500 224.0000
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<PAGE>
HISTORIC RATES
(Continued)
Five-Year
U.S. Dollar 3 Month Spread in
Month-End Swap Rate LIBOR Basis Points
========= =========== ======= ============
1992:
March 7.3700 4.3750 299.5000
June 6.5300 3.9375 259.2500
September 5.6500 3.2500 240.0000
December: 6.3300 3.4375 289.2500
1993:
March 5.4600 3.2500 221.0000
June 5.2900 3.3125 197.7500
September 4.9400 3.3750 156.5000
December: 5.4300 3.3750 205.5000
1994:
March 6.5700 3.9375 263.2500
On June 23, 1994, the mid-market five-year U.S. Dollar swap rate as
reported by Bloomberg Financial Markets was 6.9700% and three-month LIBOR was
4.6875%. The spread between these two rates was 228.2500 basis points.
The information presented in the above table is furnished as a
matter of information only. In recent years, U.S. Dollar swap rates have
been highly volatile and such volatility may occur in the future. The
fluctuations in the U.S. Dollar swap rates that have occurred in the past,
however, are not necessarily indicative of fluctuations in the rates that may
occur over the term of the notes.
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<PAGE>
HYPOTHETICAL REPAYMENT AMOUNT
The following table sets forth for purposes of illustration the
principal amount of a note that will be payable at Stated Maturity if the
spread between the five-year U.S. Dollar Swap Rate and three-month LIBOR set
forth therein is the spread for purposes of determining the principal amount
of a Note payable at Stated Maturity.
Spread in Hypothetical
Basis Points Repayment Amount
============ ================
(100) $20,124,000
(75) $20,774,000
(50) $21,424,000
(25) $22,074,000
0 $22,724,000
25 $23,374,000
50 $24,024,000
75 $24,674,000
100 $25,324,000
125 $25,974,000
150 $26,624,000
175 $27,274,000
200 $27,924,000
225 $28,574,000
250 $29,224,000
275 $29,874,000
300 $30,524,000
325 $31,174,000
350 $31,824,000
375 $32,474,000
400 $33,124,000
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
In addition to the consequences summarized in the Prospectus
Supplement under the heading "United States Taxation," set forth below is a
summary of certain United States Federal income tax consequences to original
Holders of the Notes that have purchased the Notes at their Issue Price.
The Federal income tax treatment of the payments on the Notes is
unclear because payment on the Notes at Stated Maturity is entirely con-
tingent. However, there are at least three possible alternative approaches.
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<PAGE>
Under the first approach, interest payments made on January 5,
1995, and at Stated Maturity will be taxable to a Holder that is a United
States person (a "U.S. Holder") as ordinary income at the time they accrue or
are received, depending on the U.S. Holder's method of tax accounting. At
Stated Maturity a U.S. Holder will recognize short-term capital loss if the
amount paid with respect to a Note is less than the Note's Issue Price and
short-term capital gain or possibly ordinary income if the amount paid is
greater than the Issue Price.
Under the second approach, the payments of interest on
January 5, 1995, and at Stated Maturity will be treated as a nontaxable
return of principal and reduce the U.S. Holder's tax basis (which initially
was the Issue Price). On the Stated Maturity, a U.S. Holder will recognize
ordinary income (treated as interest) to the extent the payment made by the
Company exceeds such U.S. Holder's tax basis and capital loss to the extent
it is less than such U.S. Holder's tax basis. In the case of non-U.S.
Holders, such interest will be treated as described in the Prospectus
Supplement under "Non-United States Persons." This approach is based on
existing proposed original issue discount regulations relating to contingent
payment debt obligations (the "Proposed Regulations"), which by their terms
apply to the Notes. However, the Proposed Regulations no longer appear to
reflect the IRS's current position with respect to contingent payment debt
obligations.
Under the third approach, accrual method U.S. Holders would accrue
original issue discount ("OID") into income, as described in the Prospectus
Supplement, based on the expected yield of the Note using a reasonable
estimate of the payment at Stated Maturity determined as of the end of a
taxable year or as of the issue date, or a market yield for the Note deter-
mined as of the issue date. Such amounts would be subject to subsequent
adjustments to the extent that the estimate was incorrect. The payments of
interest on January 5, 1995, and at Stated Maturity will be treated first as
payments of OID to the extent of accrued OID at such time and then as a
return of principal and, therefore, such payments would not be included in a
U.S. Holder's income. Cash method U.S. Holders would apply estimates in a
similar fashion to that described in the Prospectus Supplement under "United
States Taxation--United States Holders--Short-Term Notes" to determine the
portion of interest received that was taxable. This approach is based on
proposed contingent payment debt regulations that were announced by the IRS
in January 1993 but subsequently withdrawn.
Although under the third approach any gain recognized on the sale
or exchange of a Note would be ordinary income, under the first and second
approaches, it is not clear whether any such gain recognized would be
ordinary income or capital gain. Any loss on the sale or exchange of a Note
would be a capital loss (except in some circumstances under the third
approach).
Backup Withholding. The rate of backup withholding has been
increased from 20% to 31%.
price.doc
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